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Ethanol Industry, RFA Blast Lawmakers

CHICAGO -- American corn growers slammed California Gov. Gray Davis's decision to postpone a ban of the fuel additive MTBE, a move which would have increased the state's reliance on corn-based ethanol.

The ban on MTBE, an oxygenate added to gasoline to help it burn cleaner but later found to pollute ground water, was initially proposed for Jan. 1, 2003. Davis, however, pushed back the deadline to 2004 in part to keep California's consumer gasoline prices from skyrocketing and to protect the state from facing another energy crisis.

"The governor's decision is based on unwarranted fear that banning MTBE and switching to ethanol will cause gasoline prices to reach $3 per gallon," said Tim Hume, president of the National Corn Growers Association. "This view illustrates a complete lack of knowledge of the ethanol market and the U.S. transportation system."

The planned MTBE phaseout would create a 50,000 to 100,000 barrel per day (bpd) short fall, or five to 10 percent of the state's gasoline supply, with the brunt of the impact to be felt in southern California, according to a study commissioned by the California Energy Commission (CEC).

But ethanol producers yesterday said that stepped up efforts to meet the increased demand and transport ethanol to California would have prevented gasoline price spikes. California uses about 100 million to 150 million gallons of ethanol per year, but that amount was expected to jump to 400 to 500 million gallons in 2003.

The Renewable Fuels Association (RFA) last week also questioned Governor Davis's decision. "Governor Davis' about-face on the MTBE phase-out schedule is completely unjustified and places political expediency ahead of safe drinking water," said Bob Dinneen, RFA president. "The decision represents a callous breach of faith with California consumers that want MTBE out of their drinking water now, gasoline refiners and marketers that have invested to meet the original deadline have added more than a billion gallons of ethanol capacity to enable the timely transition away from MTBE."
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